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Disability Income Insurance

Disability Income insurance protects you in the case of loss of income. If you lose your ability to work, either from temporary or permanent disability, a disability claim can be made.

Your greatest asset is your ability to earn a living. Think about it—what would become of you and your family if you suddenly became disabled and were no longer able to work? Disability income insurance can play a crucial role in helping you manage your financial needs if a disabling illness or injury occurs.

There are many different elements that make up a disability income insurance policy so it is important to understand when and how you will receive the disability income if the need arises. For example, you will need to know how your policy defines and covers short and long-term disability and total disabilities.

In addition, it is important to know if there is a waiting period for the income to kick-in. There are also different types of policies to consider such as choosing a short or long-term policy period.

What about Workers Compensation?

Workers Compensation only kicks in if you are hurt on the job. What happens if you are hurt at home? What if you tore a ligament, while playing on that weekend co-ed baseball team, and had to have surgery. You'd be out of commission for awhile. Disability income insurance can also replace lost income on a temporary basis, while you heal.

Long-Term Disability Insurance Plan Coverage

Long-term disability insurance (LTD) begins to assist the employee when short-term disability insurance (STD) benefits end. Once the employee's short-term disability insurance benefits expire (generally after three to six months), the long-term disability insurance pays an employee a percentage of their salary, typically 50-70%.

Long-term disability payments to the employee, in some policies, have a defined period of time, for example, two-ten years. Others pay an employee until he or she is 65 years old.

Each long-term disability insurance policy has different conditions for payout, diseases or pre-existing conditions that may be excluded, and various other conditions that make the policy more or less useful to an employee.

Some policies, for example, will pay disability benefits if the employee is unable to work in his or her current profession; others expect that the employee will take any job that the employee is capable of doing—that's a big difference and consequential.

Short Term Disability Insurance Plan Coverage

Coverage usually starts anywhere from one to 14 days after you are injured or become ill and are unable to work. The time of coverage may vary from 9 to 52 weeks from eligibility. Depending on where you work, you might be required to use sick days before short term disability kicks in if it’s an illness that keeps you out of work for an extended period of time.

If you are out for longer than the short term disability benefit covers, then either a long term disability plan or permanent disability kicks in. This may happen at 10 to 53 weeks from the date of eligibility. Determination for long term disability is provided by the insurance company's team of doctors and insurance analysts who carefully monitor each case. 

Although short term disability may be part of your benefits package at work, you might want to review the coverage to determine if it is sufficient. If you have questions about your coverage give us a call and let's talk about your short term disability insurance needs.

Disability insurance is an important piece of your insurance portfolio that will help protect you during life's unexpected events.  If you are dependent on your working income, make sure it is protected!